This study aims to analyze how economicshocks and macroeconomic volatility affect urban Argentinehouseholds, the mechanisms that households employ to surviveeconomic crises, and how successful these tools are.Particular attention is given to the structure and wealth ofthe household and the gender roles of its members. Thereport identifies how to strengthen the risk managementtools to better weather future crises. First, it identifiesareas where the government can strengthen mechanisms used byhouseholds to insure against the risk of income loss due toa macroeconomic crisis or to cope with such loses when theydo occur. Second, the report addresses the appropriate roleof the government in providing assistance when riskmanagement by the household is absent or is not adequate.Finally, recognizing that some household reactions to incomeloss have important long term unintended negative effects,the report recommends on how to discourage such costlybehaviors. Among the findings of the study are: Householdsare not able to perfectly smooth consumption across periodsof economic volatility; thus, some adjustment is needed evenby the rich. No evidence exists that the macroeconomicpolicies of the 1990s are directly responsible for changesin manufacturing wages for skilled and unskilled workers.Many Argentines insure against the risk of negative incomeshocks by having mutiple jobs, and they turn to theirfamilies when needed.
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